Two years on…

To assess the Narendra Modi government’s two years in office, you cannot just look at how India is doing on the economic front, at how his ministries have been functioning, at how India has been interacting with the world at large, and at how adept his government has been at day-to-day political management; you must also look at his broader goals. Modi’s two goals will contextualise what he’s been able to do, and where he comes up short:

One, resolutely dedicated to the Sangh parivar’s Hindutva project of cultural nationalism, Modi wants to change India irreversibly. He has already achieved this. There’s no going back on the polarisation that has taken place. Expect more in his remaining three years — and possibly beyond.

Two, Modi has aimed at not just bettering the record of his predecessor, Manmohan Singh, but that of any PM India has ever had. This goal has proven elusive during the past two years. You may wonder if he has the wherewithal to accomplish this.

For most governments in the world, what each sets out to do or accomplishes in its first six months defines that government for the remainder of its tenure. If so, don’t expect change in Modi’s broad achievements.

Economy

India’s economy had bottomed out post-2010. IMF calculated GDP growth at 4.5 per cent in 2012, 5.6 per cent in 2014 and 7.3 per cent in 2016; it forecasts the world’s highest large-economy growth for India in 2017 at 7.5 per cent. Things can only get better from hereon. Driving this is the performance of some ministries, as we’ll see in the next section.

“Although ‘Big Bang’ reforms are missing, the Modi government initiated a number of steps to improve the business climate, reform the power and banking sectors and leverage digital technology for financial inclusion,” says Dharmakirti Joshi, chief economist at Crisil, India’s top credit rating agency. “With rising global headwinds, India had to look inwards for growth. The gradual uptick has not come at the cost of fiscal and monetary prudence, hence it is sustainable.”

All this, however, can’t hide the fact that on the economy, the government lacks a big idea. “This was required if India is to take advantage of the current flux in the world economy,” says a technocrat in an economic ministry. “Now was the time to do something path-breaking,” says a former home ministry official. And we all know what fellow Sangh traveller (though no longer a BJP member) Shourie said (who has an old rivalry with Finance Minister Arun Jaitley): that for Modi’s government, managing the economy meant “managing the headlines”.

Take Jaitley’s budgets: all have just been arithmetic exercises focused on standardising taxes and subsidies and improving efficiencies. “The inordinate focus on GST (Goods and Services Tax) shows the bankruptcy in thinking,” says the technocrat. “Both the US and China have differentiated tax systems, yet they remain the largest economies in the world.”

Ironically, Modi’s first choice for finance was Shourie. Of the four men running the party — Modi, Jaitley, Home Minister Rajnath Singh and Minister for Road Transport and Highways Nitin Gadkari — the PM-elect found himself outvoted on inducting Shourie. Now, after two publicly-made sharp criticisms, Shourie stands no chance of coming in and challenging the conventional thinking in North Block. Which is why some in the government want Reserve Bank of India (RBI) Governor Raghuram Rajan to be a future finance minister, despite his recent “one-eyed king” remark about India’s relatively better performance in a dismal world economy. After all, the burden of reviving the economy — through lower interest rates, to clean up corporate balance sheets and help the dormant realty sector — was laid at his doorstep.

Another idea limping along is the Niti Aayog. “What is it exactly?” the home ministry official asks. (NITI = National Institution for Transforming India; it replaced the Planning Commission.) People have stopped listening to Aayog vice-chairman and top NRI import Arvind Panagariya. CEO Amitabh Kant apparently has sufficient time to quibble on Twitter.

If you were to listen to Modi’s staunchest supporters on social media, then Modi’s “big idea” ought to have been setting a jobs target. Even Crisil’s Joshi points to “kick-starting employment generation” as one of the challenges facing Modi. The PM appears to fear making specific targets. “He has been focused on enablers for employment,” says the technocrat. The “enablers” here mean “Make in India” and programmes for skill development, to enable the large-scale industrialisation that will hopefully create jobs. It’s an indirect approach. His supporters prefer direct action. Jobs are what win you elections; its promise has brought Donald Trump a step closer to the US Presidency.

Government

Undoubtedly, corruption has plummeted in the last two years. “Middlemen used to be hanging around in every ministry,” says the home official. “They have all disappeared.” A far cry from UPA-2 when the government seemed geared towards skimming funds. Some claim that one of Modi’s major achievements has been to clean up the UPA-2’s legacy issues, markedly improving India’s Governance Index.

“Whether or not it is fear of Modi, ministers conduct themselves with integrity,” says a bureaucrat in an infrastructure ministry. “The most corrupt minister in any government is usually the roads minister. There are untold road scams from UPA-2. But Gadkari has managed to reduce the cost of roads from every ₹100 that used to be spent to ₹70.” Such graft-reduction leads to efficiency and savings, which mean more bang for the buck. No wonder Dr Panagariya speaks of new roads coming at a clip of 18 km/day, and commissioning of new rail track at 7 km/day.

Yet, as Prasad Koparkar, senior director of industry research at Crisil points out, the government has had to do the heavy lifting in infrastructure spending, given the steep decline in private-sector spending. “For a sustainable pick-up in investments, reviving private-sector participation is a must,” asserts Koparkar. “Given the quantum of infrastructure funding requirement — ₹31 lakh crore over the next five years — more needs to be done to encourage flow of long-term savings into infrastructure projects including tweaking of regulatory norms for active participation by pension/insurance funds and conducive regulatory and taxation framework for new structures and instruments like InvITs.”

Modi’s leadership enables such infrastructure delivery: he provides a clear centre of gravity to the government. In contrast, in the UPA-2, every minister “was on his own trip”. Modi keenly listens to experts; he doesn’t change course despite setbacks like Bihar elections; and because he meets the power and roads ministries so often it is their problems that are sorted out fastest.

Modi is apparently an agile PM; he tries to be “hands on” as much as possible, though this has led to criticism of overcentralisation. This is surely due to a drought of talent. “The Modi government has strangely ignored the wealth of talent that it has access to in almost all spheres of public policy,” says Nitin Pai, director of the Bengaluru-based Takshashila Institution, a think-tank on strategic affairs. Administratively, no minister is better than Modi. Compare that with AB Vajpayee, who had people smarter than him — from his principal secretary Brajesh Mishra to colleagues like Pramod Mahajan and Yashwant Sinha. Modi’s cabinet shows no such promise.

Water resources minister Uma Bharti is dangerously nonchalant given the gravity of the looming water problem. Her response to questions about the acute drought in various parts of the country was to say that it was an event for which it was pointless to plan in advance. While Modi seems on track with his “Electricity for all by 2019”, no improvement is foreseeable for per capita water consumption.

Similarly, for the promised Ganga river clean-up, Modi had last year invited the Germans for a presentation; they told him they took 20 years to clean up the Rhine. Out of the question. Now, Modi’s thinking of emulating the New Suez Canal that cost $20 billion, but took a year — with people’s participation. He needs a better minister.

Health minister JP Nadda has done nothing to target infant mortality rate, a key human development index. Agriculture minister Radha Mohan Singh has provided no ideas on tackling the drought that has hit a third of India’s arable land, the farmer suicides, which have become an epidemic in Punjab this year, or the global crash in prices of tomatoes and onions, which has driven the agrarian community to despair. If farmers’ incomes double by 2021, it will be because of inflation. Textiles minister Santosh Gangwar seems to forget that India is the world’s largest cotton producer while Bangladesh exports twice as many cotton products as us. There is no reason we should sell all our cotton to China, but ideas are scarce. Urban Development Minister M Venkaiah Naidu appears not to have heard Modi’s promise of housing for all by 2022.

Much was expected from Nirmala Sitharaman who handles the Department of Industrial Policy and Promotion (DIPP). Despite Modi’s promises of increased manufacturing, the DIPP is still missing a large-scale, cohesive industrialisation effort like China’s. Plus, she gets little help from Anant Geete (Heavy Industries) and Kalraj Mishra (Micro, Small and Medium Enterprises). Perhaps Modi needs to cherry-pick five industries and give them the attention he gives power and roads.

“Some of the foremost experts on public finance, macroeconomics, public health and education were close to the Modi campaign but somehow didn’t find a place in government,” says Pai. “Going forward the PM must not squander this resource: he must get them into the cabinet, in ministries and executive agencies.”

Nation

Rajnath Singh is another key minister who has been struggling to handle day-to-day political management. Even if it’s the BJP’s political agenda of cultural nationalism, he isn’t absolved of his responsibility as home minister.

Instead, the intolerance debate has spun out of control; intemperance over food and dressing habits is the order of the day; polarisation has widened. There is no accountability in this free-for-all. The student community — the first-time voters of 2014 or 2019 — is sulking over the way the government managed the fallout of Rohith Vemula’s suicide, or the aggression against campus activities at JNU, Jadavpur University and Allahabad University.

It has affected Kashmir, which may see a terrible summer of mass rebellion. The PDP-BJP government, which is remote-controlled by the home ministry, has done zilch to alleviate deep-rooted Kashmiri fears that Hindutva wants to alter the demographics of the Muslim-majority Valley. Politically, the government’s hardline stance on engaging separatists has backfired with the junior external affairs minister, VK Singh, last week muttering that the All Parties Hurriyat Conference were free to meet anyone — this after India had stopped talking to Pakistan in 2014 because the latter’s High Commissioner met the Hurriyat. Now each initiative by Modi seems tardy. “Sooner or later you have to talk to the Hurriyat,” says former spy chief AS Dulat. “But the longer this drags on, the more redundant the Hurriyat will gradually become. And in this, Pakistan sits pretty.”

Even the initiatives that the home ministry is belatedly taking up are tired and old. For instance, the establishment of a National Counter-Terrrorism Centre (NCTC) that was proposed after the 2008 Mumbai attacks and which Chidambaram had championed. Or the revival of NATGRID (National Intelligence Grid), an organisation set up to provide readily-accessible database to 11 organisations for fighting terrorism, also proposed after 26/11. The first NATGRID CEO, P Raghu Raman, was let go after his contract ended two years ago (he proposed a ₹10,000 crore expenditure over four phases, and, bureaucrats say, was difficult to work with); Modi has been sitting on a shortlist of replacements since the beginning of 2016.

World

“Modi has shown sparks of imagination in relation to Pakistan,” says Dulat. By inviting Prime Minister Nawaz Sharif for his inauguration, or with his surprise Lahore visit last Christmas, Modi deployed game-changers. But he got bogged down by patriotic twitterati, which gives him less manoeuvring space. “He’s had to balance hardline baggage with the necessity of working with Pakistan, so he narrowed his focus to terrorism,” says the home ministry official. “It’s not been that successful.”

Had Modi gone the UPA way he would have had to deplete his political capital on Pakistan. He didn’t, which in a way is a blessing: with the SAARC summit postponed from September to November, Modi has time and political capital to use his imagination to spring another surprise before he is in Islamabad this year.

Otherwise, Modi prefers trade to drive his foreign policy. That’s how he sorted out the nuclear deal with the US in January 2015, which had been left hanging for several years over company liability. That’s why his government withdrew e-visas to three Chinese dissidents who were to attend a pro-democracy meeting in Dharamsala last month — India’s economy is $2 trillion, while China’s is $10 trillion. “The Chinese see our trade relationship not like US-Canada but like US-Mexico,” says the technocrat. “So we have to be realistic in our dealings.” And in the neighbourhood, whether it is Myanmar, Bhutan or Nepal, India is letting trade in hydrocarbons drive the relationship; whatever their politics with New Delhi, geography compels them to trade with India.

Focusing on trade could prove worthwhile considering India’s economy is poised for revival. Modi could have driven the upswing faster and better, but he had little talent to work with and a big mess to clean up first. And as is the nature of reform, the few people who lose big will make much noise, since the majority who gain will do so incrementally.

Yet for reform to endure, Modi needs to hang around. With relentless polarisation, however, it sometimes seems that longevity is sacrificed for short-term cultural victories. Modi may forever alter the social landscape, but at the cost of undermining his goal of becoming India’s greatest PM ever.

Aditya Sinhais a journalist and writer. He has contributed a short story to the just-published anthology House Spirit: Drinking in India

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